Tax effects of renting to Employee and subbies

Tax effects of renting to Employee and subbies

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I have tried hard to find a recent post on employees living in property rented by the company but Aweb's database has repelled me.

My client is about to rent a large house 200 miles away. Work will be done for the company locally to that house for a year. Senior manager will stay occasionally overnight when visiting, so that's OK I'm thinking.

One full time employee will live there full time. Obviously we are straying into the BIK area. If the company charges him a commercial rent he might say why should he pay this if he has to be there for work. What's the solution here? And how can he escape BIK?

Two subcontractors will also live there full time. If the company charges them a commercial rent presumably that should sort the problem, but again it is to the company's benefit that they are there. I can't see any way round this. What do you think?

Replies (3)

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By Steve Kesby
20th Jun 2014 10:29

I'm not clear what the problems are

Will the full-time employee be working at the location for 2 years+?

Does these help you:

https://www.google.co.uk/#q=site:www.accountingweb.co.uk+employee+rent+accommodation

http://www.hmrc.gov.uk/manuals/bimmanual/BIM40051.htm

Thanks (1)
By Moonbeam
20th Jun 2014 10:47

More Info

The full time employee will only be there for a year so it's temporary for HMRC purposes. Client has now told me no-one will stay at the weekend, it's just for a 5 day working week.

So I think employee staying 5 days a week without paying rent might be non BIK.

Would this be the same for subbies?

I just want to know whether there would be any tax implications for employee and for the rent portion that is paid by the company re the subbies.

I will look at the google items. Thank you Steve.

 

Thanks (0)
By Steve Kesby
20th Jun 2014 11:09

I think...

... if it's only particular subbies that are allowed to stay there and they're being permitted to stay there for the purposes of the company's business, then I can't see it as being money's worth and BIM40051 (final paragraph) covers it.

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